Orthofix Medical Inc. Goodwill & Intangibles Disclosure
|
7. |
Goodwill |
The Company tests goodwill at least annually for impairment. The Company tests more frequently if indicators are present or changes in circumstances suggest that impairment may exist. These indicators include, among others, declines in sales, earnings or cash flows, or the development of a material adverse change in the business climate. The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment.
At the beginning of the fourth quarters of 2018 and 2017, the Company performed a qualitative assessment for its annual goodwill impairment analysis, which did not result in impairment. This qualitative analysis considers all relevant factors specific to the reporting units, including macroeconomic conditions, industry and market considerations, overall financial performance, and relevant entity-specific events.
The following table presents the net carrying value of goodwill, and a rollforward of such balances from December 31, 2017, by reportable segment:
|
(U.S. Dollars, in thousands) |
|
December 31, 2017 |
|
|
Spinal Kinetics Acquisition |
|
|
December 31, 2018 |
|
|||
|
Bone Growth Therapies |
|
$ |
42,678 |
|
|
$ |
— |
|
|
$ |
42,678 |
|
|
Spinal Implants |
|
|
— |
|
|
|
18,836 |
|
|
|
18,836 |
|
|
Biologics |
|
|
10,887 |
|
|
|
— |
|
|
|
10,887 |
|
|
Orthofix Extremities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Goodwill |
|
$ |
53,565 |
|
|
$ |
18,836 |
|
|
$ |
72,401 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2018 | Feb 25, 2019 | Showing above |
| 2017 | Feb 26, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 29, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.